Tencent, China’s largest social media and gaming business, is to spin off its music division (Tencent Music Entertainment). South Africa’s media conglomerate Naspers owns 31 per cent of Tencent.
The announcement, made in a filing to the Hong Kong stock exchange, said there would be an initial public offering and subsequent reports suggest that the target float could raise $1 billion.
Spotify is another investor in Tencent, although the company – big as it is – has to contend with rivals Alibaba Group, Baidu and Netease, as well as with pirated usage. Spotify and Tencent Music do not compete in China, but are rivals in the rest of South East Asia.
Spotify went public earlier this year and now has a market value of some $31 billion.